Parrs Wood technology college in Manchester runs a huge information technology network. Over 700 machines make this one of the most advanced school systems in the country. So did it cost them a fortune? The answer is a resounding "no".

For a start, 350 of these machines are thin clients - basically a keyboard and a monitor networked to a server. They are not new PCs but are refurbished machines, available free through computer recyling schemes such as the Guardian's Tools for Schools.

The assistant head, Samantha Wells, says: "We're saving thousands." You might assume this is only something a big, technically-proficient secondary can do. You'd be wrong again.

The second common denominator here is Linux, a computer operating system. Technically, it is a 32-bit, multi-tasking, multi-user operating system. It's the equivalent of Microsoft's Windows - and it's free.

Linux began in 1991 in Finland when Linus Torvalds began building an operating system that would run on an IBM-compatible PC with an Intel 386 processor.

He appealed for volunteers over the internet and made the source code open - the program details were available for anyone to download and work on. In a remarkably short period of time a sophisticated operating system was created.

There are also other types of open source software. The Apache web server, for instance, powers nearly three quarters of internet websites.

But Microsoft's stranglehold over the desktop has been almost total.The American company's strength is its omnipresence. Buyers want the reassurance of a familiar product, something compatible with the systems run by other people. Linux was seen as an unacceptable risk.

And that is true. Installing open source onto an existing PC is a job for an expert. But that is not how schools buy their computers. When a school buys a network it typically gets the software pre-installed.

With a Linux installation the school would go to one of the open source companies and buy a system in the same way. Some companies will reconfigure existing systems, but most prefer to set up a system from scratch. The school is getting the software free; what it is buying is the support service.

The British Educational Communications and Technology Agency (Becta) points out that support is often the most expensive end of the deal. "Our surveys show that software is only six per cent of a school's ICT costs," says Stephen Lucey, the agency's technical director.

"We're not averse to open source; we use it within our organisation. But ICT technicians are more likely to have Microsoft experience and the availability of the expertise is hindering the take-up [of open source]."

Lucey's arguments are not shared by Malcolm Herbert, a man we also ought to take notice of because, until recently, he was doing Lucey's job.

"I left Becta because I felt they were not interested in pursuing open source solutions," says Herbert, who is director and government business adviser with Redhat, a specialist in supporting Linux and other open source applications. Herbert says the Becta figures appear to be based on new machines where the software is bundled in with the purchase.

This ignores the thin client solutions adopted by schools like Parrs Wood and Ocker, where the machines cost virtually nothing. It also ignores the high upgrade costs implicit in any decision to use commercial software.

But bias against open source doesn't end there. Many national and regional procurement processes actually prevent open source solutions being offered, either by demanding specific applications or by excluding, on financial grounds, those companies offering open source solutions.

Herbert says it is common for commercial software to be explicitly specified. "The Computers for Teachers (CFT) specifications for 2001 did not allow for Linux to be provided as an operating system," he points out. "And all the suppliers offered Microsoft Office as the only productivity software."

Yet there are open source equivalents of Office, including Open Office and Star Office - solutions that Becta's Lucey concedes work "perfectly adequately".

Star Office is Sun's low-price version of the open source Office package. Sun started charging for the software suite purely to persuade business users that it was a serious competitor. Since it removed the DIY open source tag, sales have taken off, but Sun is still offering the suite to education users free of charge - a move that the company claims could save UK schools £48m.

A search on Becta's website produces very little information about open source, despite Lucey's claim that the quango supports a level playing field where any system is judged on its merits.

What we seem to have is a chicken and egg situation, where open source solutions are found in just a few schools, and local education authorities and government agencies use this modest takeup as a reason for not promoting its use.

Schools that are using open source, however, claim to make huge savings. Fen Systems, which provides Linux servers and desktops, backed up by full technical support and remote management, argues that it can get a network up and running for less than £3,000. For one client it reduced annual costs by 85%.

Until recently, even when open source was used, it was locked in the back office, running the servers and email systems. That may soon change. At Parrs Wood the desktop software is still Microsoft, but Samantha Wells says that the school is considering removing Windows altogether. This could save £30,000 a year.

IBM took the decision to offer Linux as the operating system on several of its machines some time ago. In the UK education market, RM's Ray Fleming says: "We're not getting customers banging on the door asking for open source, but we can provide it and we have done on higher education contracts."

If schools wanted them, RM would supply and support Linux-based systems, Fleming says.

With so much curriculum information now on the net, the most important piece of software on a computer will soon be the browser. And Mozilla, an open source browser, is free and will run happily on Microsoft, Macs or Linux systems.

Schools that spent their National Grid for Learning money on new networks are finding that they cannot afford to renew them.

The thin client solution, with open source software and a broadband connection to speed up the browsing, could be the answer for Britain's schools. Microsoft's stranglehold may be about to loosen.